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Coca-Cola Enterprises Inc (NYSE:CCE)
Beneish M-Score
-2.46 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Coca-Cola Enterprises Inc has a M-score of -2.46 suggests that the company is not a manipulator.

CCE' s 10-Year Beneish M-Score Range
Min: -4.75   Max: -0.74
Current: -2.46

-4.75
-0.74

During the past 13 years, the highest Beneish M-Score of Coca-Cola Enterprises Inc was -0.74. The lowest was -4.75. And the median was -2.56.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Coca-Cola Enterprises Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.0762+0.528 * 1.0234+0.404 * 0.9934+0.892 * 1.0234+0.115 * 1.1066
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9193+4.679 * -0.0165-0.327 * 1.083
=-2.46

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $1,793 Mil.
Revenue was 1870 + 2032 + 2174 + 2156 = $8,232 Mil.
Gross Profit was 650 + 688 + 787 + 753 = $2,878 Mil.
Total Current Assets was $2,770 Mil.
Total Assets was $9,691 Mil.
Property, Plant and Equipment(Net PPE) was $2,324 Mil.
Depreciation, Depletion and Amortization(DDA) was $305 Mil.
Selling, General & Admin. Expense(SGA) was $1,891 Mil.
Total Current Liabilities was $2,564 Mil.
Long-Term Debt was $3,730 Mil.
Net Income was 115 + 135 + 289 + 182 = $721 Mil.
Non Operating Income was -1 + -3 + 1 + -2 = $-5 Mil.
Cash Flow from Operations was 67 + 236 + 450 + 133 = $886 Mil.
Accounts Receivable was $1,628 Mil.
Revenue was 1850 + 1916 + 2070 + 2208 = $8,044 Mil.
Gross Profit was 634 + 662 + 775 + 807 = $2,878 Mil.
Total Current Assets was $2,437 Mil.
Total Assets was $8,913 Mil.
Property, Plant and Equipment(Net PPE) was $2,220 Mil.
Depreciation, Depletion and Amortization(DDA) was $327 Mil.
Selling, General & Admin. Expense(SGA) was $2,010 Mil.
Total Current Liabilities was $2,540 Mil.
Long-Term Debt was $2,805 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(1793 / 8232) / (1628 / 8044)
=0.21780855 / 0.20238687
=1.0762

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(688 / 8044) / (650 / 8232)
=0.3577822 / 0.34961127
=1.0234

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (2770 + 2324) / 9691) / (1 - (2437 + 2220) / 8913)
=0.47435765 / 0.47750477
=0.9934

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=8232 / 8044
=1.0234

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(327 / (327 + 2220)) / (305 / (305 + 2324))
=0.12838634 / 0.11601369
=1.1066

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(1891 / 8232) / (2010 / 8044)
=0.22971331 / 0.24987568
=0.9193

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((3730 + 2564) / 9691) / ((2805 + 2540) / 8913)
=0.64946858 / 0.59968585
=1.083

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(721 - -5 - 886) / 9691
=-0.0165

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Coca-Cola Enterprises Inc has a M-score of -2.46 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Coca-Cola Enterprises Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.01290.92831.15281.01750.93852.23270.89190.83111.06081.0512
GMI 1.01371.01151.02151.03561.033410.99871.00991.01681.0321
AQI 0.98780.99350.90651.00270.55341.53261.030.95251.0131.0386
SGI 1.04961.03041.05661.05721.04160.29881.03021.23380.97321.0186
DEPI 0.97710.97471.0460.96310.94661.11221.2180.84460.9981.0893
SGAI 1.02010.99390.98720.96370.99060.79641.01380.96921.01470.9698
LVGI 0.93650.97161.09610.94341.48960.38521.55371.12611.06861.0921
TATA -0.0387-0.04330.0077-0.0131-0.3847-0.0321-0.0233-0.0121-0.0287-0.0168
M-score -2.59-2.71-2.30-2.43-4.63-1.66-2.81-2.55-2.59-2.48

Coca-Cola Enterprises Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.83110.95760.95111.09691.06081.01840.99841.10611.05121.0762
GMI 1.00991.01051.01381.01291.01681.01771.02541.03161.03211.0234
AQI 0.95250.97940.98560.99761.0131.00621.01561.01211.03860.9934
SGI 1.23381.17841.04960.98220.97320.96820.98561.00711.01861.0234
DEPI 0.84460.83720.86920.97850.9980.99361.03611.07941.08931.1066
SGAI 0.96920.94260.96210.98671.01471.04581.02971.01440.96980.9193
LVGI 1.12611.10481.11791.08441.06861.14011.12591.13351.09211.083
TATA -0.01210.0033-0.0136-0.0213-0.0285-0.0517-0.0278-0.0232-0.0168-0.0165
M-score -2.55-2.39-2.59-2.53-2.59-2.78-2.65-2.50-2.48-2.46
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